The first obvious blow to Greek tourism came when the country suspended international rail services 16 months ago. Since then, it's gone right off the rails. Before last weekend's election, nightmare scenarios were painted in the media of food shortages, street protests and a withdrawal from the euro. Not exactly images designed to encourage Britons to book a holiday. While the focus was on Athens, the Greek islands were quietly going about their business – albeit with many empty tables and rooms but with a warm welcome to tourists who had travelled there. With the latest crisis averted, what does the rest of the summer hold for Greece? Will it be bargains all round, empty beaches and retsina on the house?

Is it a Greek tourism tragedy?

Not quite, although numbers are definitely sagging. More than 2.3 million Britons visited in 2011 – but bookings are down 11% so far this season. If sustained, that equates to 250,000 fewer British visits this year.

George Tsakiris, president of the Hellenic Chamber of Hotels, estimates that 500,000 summer bookings normally made in early June were lost because of uncertainty ahead of the election. Since then, Sunvil Holidays and other UK tour operators have reported a surge of bookings for travel during school holidays. Barrie Neilson, owner of Sailing Holidays, says: "We have an extremely slow July but August and September look reasonably OK."

Who's joining us on the beach?

Reports say that only half the normal number of Germans are visiting this year, with many fearing a negative reaction from locals. Such a decline in numbers will particularly affect Crete.

Many tourists from the old eastern bloc are now going to Greece but they tend to opt for "all inclusive" places and don't get out into local communities like the British. According to Neilson: "We're noticing a lot less people about than normal. The biggest effect for locals is the disappearance of local Greek tourists, who would come to the coast from the hinterland."

What sort of welcome can we expect to receive?

Open arms and bear hugs. Chris Wright, managing director of GIC The Villa Collection, says that it's like the Greece of 20 years ago – very friendly and very welcoming.

Jo Marsden of Whitchurch, Dorset, returned this week from a holiday on Paxos. "The spirit of the proprietors was relaxed and extremely affable. They couldn't do enough for the guests, who were mostly British," she says.

"This sense of hospitality extended to all the island's inhabitants. Prices were comparatively low from restaurants to boat trips and taxis. Our impression was that there was no thought of capitalising on the current Greek crisis."

What are the prices like?

As Marsden observes, prices in hotels and restaurants have come down across the board. There has been a de facto devaluation in Greece even though they are still in the euro. As the local population is forced to spend less, so prices come down. However, Keren Levy, who was in Paros the week before last, said: "Hotel and restaurant prices were not noticeably lower. Regular faces, the yearly visitors, seemed willing to pay them."

Noel Josephides, owner of Sunvil, has been selling holidays to Greece since 1970 and says the oversupply of hotels and airline seats also means the price of a package holiday is lower this summer: "During the boom years, too many hotels were built, and too many villas, too many apartments,, and now the price is being paid. Nothing is ever full because there is so much out there – and though tour operators have cut back, the no-frills airlines have poured on capacity so they, too, are rarely full."

What about the strikes?

With Greece so dependent on tourism, there's even a chance of less disruption to travel plans than usual this summer. According to Eftichios Vassilakis, vice-chair of Greek carrier Aegean Airlines, there have been no strikes in Athens in the past four months, "which is much better than last year".

A spokeswoman for the Association of Independent Tour Operators (Aito) in the UK said the same: "There have been fewer strikes this year than is the norm, and indeed fewer than in Italy."

What are the Greeks doing to bring us back?

The Greek Tourist Board has set up a website and is appealing to social-media-savvy volunteer supporters to inspire goodwill. The interactive site – TrueGreece.org – is designed to share positive travel experiences and help downplay any negativity.

The Parthenon in Athens. Photograph: Getty Images

Not everyone is impressed. Josephides said: "In the best of times, no action is taken quickly. When the minister (of tourism) came to the UK in February, we met and said that Greece had to go on the offensive because there is so much bad publicity.

"It is too little, too late – but we have got to help regenerate tourism. We are linked to Greece and our fortunes are tied."

He has contributed 20 airline seats to send "ambassadors" to Greece to spread the goodwill message. More co-operation from other private sector partners is being sought. Expect sightings of several minor celebrities eager to travel and help the cause this summer.

One positive start would be for the Greek National Tourist Office in the UK to use social media itself: its Twitter account has not updated since 20 October last year.

What about the currency?

It is nearly four years since the pound bought you so much in the eurozone. It's now around €1.25 to £1 and, on current trend, will appreciate slightly more before the school holidays.

Thomas Cook suggests that when changing sterling for euros, you ask for smaller denominations: €5, €10 and €20 notes. This is because, should Greece pull out of the euro – which seems unlikely in the short term – the interim currency will be existing euro notes with a corner clipped, which will be worth 30-40% less. The thinking is that you will lose more on a transaction with a €50 or higher note.

But do pack a credit or debit card – and a prepaid euro debit card, which incurs no charge at an ATM and is widely accepted by retailers. For more advice visit guardian.co.uk/money.

Should I take cash?

Some retail outlets and cafes are already asking for cash rather than accepting cards. Sir David Miers, a former British ambassador to Greece, who recently returned from a trip to Corfu, said: "There is a fear among Corfiots of what will happen if Greece has to revert to the drachma. ATMs might cease to operate while there is uncertainty about the currency. The tendency for people to want settlement in cash rather than by credit card might increase. But for tourists who have plenty of hard currency in their wallets, that should not be a problem."

Dana Facaros, author of the Cadogan Guide to the Greek Islands, warned: "It is not a problem (yet) on the big islands such as Corfu, but I can imagine you might get caught out on a small island, especially one with only one or two ATMs. Greece isn't having a bank run, more of a slow motion bank walk."

Journalist Sean O'Hagan, who was in the region last week, said: "We found ATMs that didn't have any money, and other holidaymakers told us of restaurants and cafes that were just accepting cash."

What sort of holiday should I book to be helpful?

Greece needs you this summer: one in five of the working population is employed in tourism, and the money the industry brings in accounts for 17% of GDP. There are two ways to look at this: book your own hotel or B&B direct and the money stays in Greece. But you still have to buy your flight and that money doesn't, unless you choose to fly Olympic or Aegean Airways.

Or you can buy a package. They are undeniably cheap. Olympic Holidays has just cut prices, by 25%, for the first half of July. Buy from an international operator such as Tui, which sells into its own hotels, and little money will stay in Greece.

If you buy from a tour firm that specialises in Greece, a lot more will go into the local economy, as has happened for years. Sailing Holidays has been operating for 25 years and runs 178 boats around the Greek islands; Sunvil has been supporting Greek holidays since 1970. Both they and other specialists, such as Ionian Island Holidays, will always continue to support hoteliers – it's their business, but also a lifelong passion.

Barrie Neilson of Sailing Holidays said: "I've had hoteliers saying we're saving their homes this year. We support the little guys."

These firms are also Atol-bonded, and will guarantee your holiday should things go awry with the euro, with either a refund or an alternative holiday. If you travel independently, the risk is yours.

Personally? I'd go for a flight to Athens (currently around £200 on easyJet) and a ferry from Piraeus. Then, in an old-fashioned way, book a room from the gaggle of apartment owners who will meet the boat in the harbour. There are lots of stories this summer of rooms for under £40 a night. If that's a bit too risky for you, book independent accommodation before you go (see below).

Which areas would benefit the most from tourism?

There is an argument that northern Greece will benefit most. In February 2011, international rail services to Greece were halted to save money, cutting off routes from Turkey, Bulgaria and Serbia. It means the second city of Salonika and the region around Mount Olympus are cut off from tourism as few head north of Athens.

Greek travel blogger John Malathronas says: "Those islands with airports such as Corfu, Crete or Mykonos will always be fine: they will always have tourists. But the north and the smaller islands will suffer this summer."

Some islands are being boosted by an influx of Russians and Ukranians, while Santorini and Corfu – traditional high-value holiday spots for Britons – are also still selling well, particularly pricey luxurious villas. Added Malathronas: "A friend in Santorini tells me the island is busy – and this year is also seeing a lot of Chinese visitors coming in off the cruise ships."

So go for smaller, barely known islands which are more likely to be struggling.

Greek Sun Holidays (01732 740317, greeksun.co.uk) has been going since the 1960s, and provides a broad range of tailormade trips and island-hopping holidays to lesser-known islands (Amorgos, Schinoussa, Folegandros, Lipsi, Fourni, and more).

For holidays to family-run properties, try Hidden Greece (020-8758 4707, hidden-greece.co.uk), which offers a large range of islands, including newly launched Astypalea and Pserimos in the Dodecanese, sandy with a population outnumbered by goats – the company was once told by the Greek Tourist Office that they had never heard of some of the isalnds they offered, including this one! .

If you can't be bothered with the hassle of arranging it yourself, Island Wandering (islandwandering.com/) specialises in island-hopping holidays for adventurous independent travellers, covering 68 islands.

How should I travel independently?

To book directly with owners, try the websites below. (Many properties had hardly any bookings all summer, indeed all year, so you could negotiate a discount, if your conscience allows.)

Holiday-rentals.co.uk has thousands of places to stay in Greece, lots of apartments and bargain properties. It currently has apartments sleeping four for around £550 a week in Crete, a house sleeping 10 in Anavissos, and a beach resort near Athens for €1,050 a week available all of July and August, and a self-contained villa with pool in Almirida, near Chania, west Crete with mountain and sea views at , available all summer and autumn from £880-1,330 per week sleeping nine.

Holidaylettings.co.uk had 179 places sleeping between four and six available for the week 3-10 August, such as a house on Lefkas with a pool sleeping six, available all year, from £1,217 a week.

You could also try villarenters.com, which has a late-deals section including a stone house on Samos (ref 77128) for £330 sleeping five departing 30 June; and dreamvillarentals.com which has slightly smarter places. The Spirit of Greece (01372 749579, spiritofgreece.co.uk) has a special offers page with last-minute availability, including its "most popular" villa, Villa Danai on Paxos, with three bedrooms, sea views and a pool for £750 for a week from 2 July.

Houses of Pelion (pelion.co.uk) has charming places to stay on the unspoilt mainland Pelion peninsula, from around £200-400pp in summer.

For a deal with flights included, Meon Villas focuses on popular destinations such as Corfu, Lefkas, Crete and Cephalonia. Its late-deals section meonvillas.co.uk/offers/promo1 includes Stefanos, a villa with pool in Aghios Stefanos, Corfu, sleeping six for £393pp departing 16 July, or £654pp including flights, including flights from Gatwick.

To cut straight to the mostgorgeous accommodation visit i-escape.com. It has 67 places in Greece, from boutique hotels to stylish self-catering villas.

You're less likely to find deals on flights: July and August are expensive as usual. As an example, easyJet flights from Luton to Corfu cost around £260 return, flying weekend to weekend at the end of July; in July and August the lowest return fares were around £150pp. For the same dates Luton to Crete it was around £300, or cheapest returns £170-180 in July and August. From Manchester to Crete it was about the same, or from around £140 in July, for flexible departure days.

Cheapflights.com said it had seen a rise in searches for flights to Athens this week , 16% up on the previous week, and has summer flights from around £158 return from the UK.

What if I want to book a package or find a deal?

Going with a specialist tour operator who has worked with local Greek businesses for years is a more ethical option than a major operator who is more profit-driven and possibly exploitative of people desperate to fill rooms. Plus many have access to airfares and room rates not available to individual travellers, and you get the peace of mind of financial protection.

Start at aito.com, which includes 40 Greek holiday specialists as well as accommodation including villas with pool to B&Bs, apartments and rooms above tavernas. Also look at Sunvil Holidays (020-8568 4499, sunvil.co.uk); GIC The Villa Collection (020-8232 9780, gicthevillacollection.com); and Sailing Holidays (020-8459 8787, sailingholidays.com). Ionian and Aegean Island Holidays (020-8459 0777, ionianislandholidays.com) is pushing late deals, with up to 40% off self-catering holidays. Departing on 6 July, seven nights on Skopelos at Metochi Villa with private pool, three bedrooms, flights from Gatwick or Manchester, transfers, car hire and welcome hamper costs £587pp (£392pp off).

I've booked but I'm not sure. Can I cancel?

No. The Foreign and Commonwealth Office (FCO) has no warnings on its website about travel, so if you've booked, there is no legal reason for an operator to give you a refund. If worried, book through an Atol-backed tour operator so that if trouble breaks out, you will be evacuated. If trouble breaks out before travel and the FCO changes its travel advice, then you will be offered a refund or alternative holiday.

How can I travel there more ethically?

Eat out nightly, make sure any produce you buy is grown in Greece, not imported, enjoy a drink or two, explore the shops and buy local crafts. Travel around and try different places to spread your money.

A new website, launched last month, encourages visitors to explore Athens with a local. Dopios.com, which means local in Greek, lists 47 residents of Athens who will guide you around, from eating to walks to nightlife – even on the back of a motorbike. The residents charge for the tour. For example, Lila Tzamousi offers an all-day guided group trip to the island of Aegina for £40 a head: after the cost of the boat and food, she makes around £7. Tzamousi said: "Despite the situation, we never lose the fun and our sense of hospitality."

How do I learn about the Greek economic crisis first hand?

If you don't want to just lie on the beach pretending everything's OK and would rather get to the bottom of what's up with Greece, turn to Political Tours (0843 289 2349, politicaltours.com/tours/greece-the-euro), which offers trips that allow travellers to experience current affairs first-hand.

Among its programme, which also includes expert-led trips to North Korea, Libya, Northern Ireland, Kosovo and London's own City, is a one-off trip in August, which examines the Greek sovereign debt crisis and asks what next for the eurozone, through talks by leading analysts, NGOs, local leaders and ordinary people, on the island of Samos and in Athens. Visits include Syntagma Square, where demonstrators massed, Ermou Street where it was once impossible to find a shop to rent but now many stand vacant, Perama shipyard, once a vital engine of the Greek economy and Corinth, a farming area, as in the past two years tens of thousands of Greeks have chosen to become farmers. The trip runs 25 August–2 September and costs £2,750 (single supplement £250), excluding flights.

How can I keep up to date with what's happening?

Before travelling, catch up on a number of websites that host live blogging from Greece. See

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